EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0804318
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Sustainable Organics (Wooshaway) Pty Ltd applied for a TCO in respect of certain compost waste bags on 16 April 2008.
Instrument
TCO No 0804318 was made on 30 September 2008. It declares that those certain compost waste bags are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%. The rate of duty for the goods subject to the TCO is free.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. Two submissions objecting to the TCO application were received from Andrew Kohn Pty Ltd and the Aperio Group.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 0804318 is taken to have come into force on 16 April 2008.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Tariff Concession Instrument No. 0804318, made under the Customs Act 1901, was enacted to provide tariff concessions for certain compost waste bags applied for by Sustainable Organics (Wooshaway) Pty Ltd on 16 April 2008. The Act, managed by the Parliament of Australia, aims to facilitate economic growth and trade by allowing the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that lower the customs duty on specified goods. The policy objective is to ensure that the concession is granted where no substitutable goods are produced in Australia, thereby promoting competitiveness and potentially reducing costs for importers of these goods. This instrument was introduced to address the gap where certain imported goods, if not subject to lower duty rates, could potentially disadvantage Australian businesses and consumers by increasing the cost of these goods.
Scope and Application
The Customs Act 1901 applies to any person or entity seeking tariff concessions on goods imported into Australia. The Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), provided that the application meets the core criteria outlined in the Act, specifically that no substitutable goods are produced in Australia in the ordinary course of business. The TCO scheme operates nationally across Australia, with the CEO having the authority to issue orders that confer tariff benefits on specified goods, effectively reducing or eliminating customs duties on those goods. The TCO No. 0804318, for instance, was made for compost waste bags, resulting in a tariff rate reduction from 5% to free. While the Act facilitates the process for tariff concessions, it also mandates consultation by publishing notices in the Gazette, allowing objections to be raised. However, the Act explicitly excludes certain goods from eligibility, as specified in section 269SJ of the Act, and does not impose any liabilities on persons other than the Commonwealth.
Key Provisions
The Customs Act 1901, under section 269F, allows individuals or entities to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). If the CEO is satisfied that the application is not for goods specified in section 269SJ, which lists goods ineligible for a TCO, the CEO must then determine if the application meets the core criteria set out in section 269C. This requires that no substitutable goods, as defined in section 269D and 269E, were produced in Australia on the day the application was lodged. If the CEO is satisfied with the application, they must issue a written TCO under section 269P(3), specifying that the goods are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995, thereby reducing or eliminating the customs duty.
The Act imposes several obligations on the parties involved. Firstly, applicants must ensure their applications are complete and comply with the criteria outlined in section 269C. The CEO, upon receiving a valid application, is obligated to publish a notice in the Gazette under section 269K(1), inviting objections from interested parties. If objections are lodged, the CEO must consider them before making a decision. The CEO must also act swiftly to make the TCO effective from the date the application was lodged, as stipulated in subsection 269S(1). Additionally, the CEO is required to ensure that the TCO does not disadvantage any person or impose liabilities on anyone in respect of actions taken before the TCO’s registration.
Failure to comply with the provisions of the Customs Act 1901 can result in legal consequences. If a TCO is issued improperly, the order can be subject to judicial review, and the CEO could face legal action for failing to follow due process. While the explanatory statement does not detail specific offences, penalties, or civil/criminal consequences for breaches, under general legal principles, penalties for non-compliance could include fines, penalties for misleading or deceptive conduct, or other civil or administrative penalties as prescribed by relevant laws. The exact penalties would depend on the nature and severity of the breach, as well as the specific provisions of the Customs Act and any related regulations.